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EDITORIAL: San Juan County is tops in the state

Updated:
05/10/2013 05:54:38 PM MDT

When it comes to natural gas production, San Juan County is tops in the state.

Throughout the last decade and up to present, Northwest New Mexico has consistently produced more than 63 percent of the state's natural gas, according to New Mexico Oil Conservation Division statistics.

But San Juan County was not the only place in the country producing large amounts of natural gas. And as has been reported in The Daily Times, there is now a glut that has driven prices down.

Local producers are cutting back their operations waiting for an increase in prices sufficient to return their wells to profitability.

In the meantime, the bad news is trickling down. Tax revenue decreases along with state and federal budget cutting and an increasingly sluggish economic recovery are forcing local officials to consider rolling back services and dipping into precious reserve funds.

All is not gloom and doom, however.

Some in New Mexico are looking for ways to turn the wealth of natural gas in this region back into an economic driver. For the most part that involves finding new uses and new markets.

Ray Hagerman, the new CEO of Four Corners Economic Development, talked to The Daily Times' editorial board recently about his vision for the future.

Hagerman spoke of the need for rail access that could be used to export goods from the area. And a railhead in Farmington would provide a more cost-effective way to export liquid natural gas, or LNG.

Other obstacles exist, however, including limits on where U.S. producers can sell their product and the need for ports equipped to handle LNG.

Rio Grande Foundation President Paul Gessing recently visited Farmington to talk about exporting LNG. One of the problems is a law stating that LNG cannot be sold to countries that do not have a foreign trade agreement with the United States.

Large markets in Japan and India would be opened if that restriction was removed, Gessing said.

That trade would add $200 million annually to the state's economy and create 2,000 new jobs, Gessing said.

We haven't checked the math, but there is no doubt that increasing LNG exports would have a positive impact on the state's economy. And because of the local production possibilities, much of that positive impact would land in San Juan County if there is a way to transport it.

Hagerman also suggested something closer to home. He wonders why the area cannot become energy independent by using natural gas wherever possible. That would include power plants, commercial and municipal vehicle fleets, school buses and other uses.

Area residents might see natural gas filling stations popping up to supply their personal vehicles, he said.

If successful, it could set an example for others to follow in a nation awash in LNG, Hagerman said.

"The possibility of it as a pilot notion is critically important," Hagerman said. "We would have the expertise in building that É the expertise in how to do it."

Hagerman says there is no silver bullet, and he plans efforts to diversify the economy.

But we believe Hagerman's optimism about the future of natural gas is merited if community leaders can lay the proper groundwork.

"This is one of those things we're going to work at for several years and become an "overnight success,'" Hagerman said.